1. Consent
1.1. 6 Requirements of Consent:
1.1.1. 1) Subjects of the Contract (identity not always necessary)
1.1.2. 2) Objects of Contact (must be lawful, possible, AND determined or determinable)
1.1.3. 3) Lawful Cause (need not be expressed)
1.1.4. 4) Essential Elements
1.1.4.1. *Nonessential elements are suppletive. Nonessential elements can be elevated to binding, but they can never become essential elements.
1.1.5. 5) Serious Contractual Intent
1.1.6. 6) Confer Power on Offeree to Accept
1.1.6.1. Otherwise, it's an invitation to negotiate.
1.2. OFFER
1.2.1. Manner and Medium
1.2.1.1. Need not be identical, but must be reasonable unless otherwise stipulated by law or parties.
1.2.2. Irrevocable vs. Revocable Offers
1.2.2.1. IRREVOCABLE:
1.2.2.1.1. If offer is not accepted within specified period of time (or reasonable period of time when no time specified).
1.2.2.1.2. Irrevocable offers are unilateral juridical acts
1.2.2.1.3. Cannot be assigned to others
1.2.2.2. REVOCABLE:
1.2.2.2.1. If offer is not accepted within the specified period of time.
1.2.3. Offeree can do 3 things when a complete offer is communicated:
1.2.3.1. 1) reject (reception theory)
1.2.3.2. 2) counteroffer (reception theory)
1.2.3.3. 3) acceptance/mirror image rule (revocable = dispatch and irrevocable = reception)
1.3. ACCEPTANCE
1.3.1. Acceptance by Performance:
1.3.1.1. Can accept by commencing performance
1.3.1.1.1. Neither party can back out; contract formed
1.3.1.1.2. Failure to complete performance = breach
1.3.1.1.3. Must give notice of commencement unless party knows you'll begin when X
1.3.1.2. Can accept by completed performance
1.3.1.2.1. Offeror cannot revoke until performance completed, but not obligated to pay until receipt of performance
1.3.1.2.2. Offeree can revoke until performance completed; doesn't have to finish
1.3.1.3. EXCEPTION: can accept by silence in one of two circumstances
1.3.1.3.1. 1) remission of debt
1.3.1.3.2. 2) any other beneficial circumstance where they'd obvi wanna accept
1.4. Interpretation of Contracts (i.e. when language is ambiguous)
1.4.1. Step 1: Objective Theory
1.4.1.1. R.P. Standard
1.4.1.2. Words Clear:
1.4.1.2.1. Strict construction: no further interpretation when words are clear and explicit and lead to no absurd consequences.
1.4.1.3. Words susceptible to different meanings:
1.4.1.3.1. Given meaning that conforms to the object of the contract.
1.4.1.3.2. If provision has > 1 meaning, choose meaning that renders provision effective
1.4.1.4. Scope:
1.4.1.4.1. Only covers things it appears the parties intended to include
1.4.1.4.2. Specific situtations/provisions in a contract intended to have general scope
1.4.1.5. Equity/no unjust enrichment
1.4.2. Step 2: Subjective Theory
1.4.2.1. will of the parties
1.4.2.2. Words susceptible to different meanings/doubtful provisions analyze these 5 factors:
1.4.2.2.1. 1) nature of this contract
1.4.2.2.2. 2) other contracts of like nature between the parties
1.4.2.2.3. 3) Equity
1.4.2.2.4. 4) Usages
1.4.2.2.5. 5) conduct of the parties before and after contract's formation
1.4.2.3. Good Faith
1.4.2.4. If Doubt Cannot be Resolved:
1.4.2.4.1. Fallback rule:
1.4.2.4.2. Four Corners Rule:
1.5. Formal Validity:
1.5.1. Oral contracts are valid unless otherwise specified
1.5.2. Formality by Law:
1.5.2.1. Offer and acceptance must comply with legal formalities (otherwise: absolutely null)
1.5.2.1.1. authentic act
1.5.2.1.2. act under private signature
1.5.2.2. Marriage, Sale or Transfer of Immovables = act under private signature
1.5.2.2.1. Note: transfer of ownership of immovable must be recorded in conveyance records of parish where property is.
1.5.2.3. Donation inter vivos = only formality where authentic act is required.
1.5.3. If formality is not required but parties agree to it:
1.5.3.1. Presumption that the parties are not bound until in form agreed upon.
1.5.3.1.1. curable by new agreement of parties
1.6. Options Contracts
1.6.1. Grantor/Grantee
1.6.1.1. Grantor is bound to sell if option accepted
1.6.1.1.1. i.e. if option is accepted, you have to sell it (or else breach)
1.6.1.2. Grantee just has option to buy if they want
1.6.2. Requirements:
1.6.2.1. 1) complete offer
1.6.2.2. 2) specified time period (i.e. cannot just be reasonable time)
1.6.2.3. 3) power of grantee to accept
1.6.3. Unilateral contract (promise to contract)
1.6.4. Heritable
1.6.4.1. Can be assigned
1.6.4.1.1. EXCEPTION: if it's specific performance (adele singing)
1.6.5. Can be onerous OR gratuitous
1.6.6. Indivisible (aka if assigning it to multiple parties they must choose the same thing/take it as a whole
1.7. Right of First Refusal
1.7.1. May be enforced by specific performance
1.7.2. Unilateral and conditional promise to contract
1.7.3. Can be onerous OR gratuitous
1.7.4. Must meet formal validity requirements AND must agree upon express or definite terms
1.7.4.1. Indefinite terms = absolutely null
1.7.4.2. Differs from Options: options seller says hey take it or leave it. RoFR has negotiations/Market value? or are they both express/definite terms in offer?
1.7.5. Hinges upon seller wanting to actually sell
1.7.6. Same/Fair terms
1.7.6.1. If promisee fails to exercise right within 6 months (and promisor hasn't finalized sale w someone else) RoFR revives to promisee
1.7.6.1.1. i.e. NOT if promisee rejected
1.7.7. Time for Acceptance:
1.7.7.1. Default: reasonable time
1.7.7.1.1. EXCEPTION: Immovables
1.7.7.1.2. EXCEPTION: Movables
1.7.8. Indivisible (aka if assigning it to multiple parties they must choose the same thing/take it as a whole
1.8. Offer of Reward Made to the Public
1.8.1. Unilateral juridical act
1.8.2. Effective once posted and communicated to the public
1.8.3. Knowledge of offer not important
1.8.3.1. will be binding to performer even if they didn't know
1.8.4. May be revoked by offeror if:
1.8.4.1. Made Timely
1.8.4.1.1. before act was completed
1.8.4.2. Made Properly
1.8.4.2.1. equally effective means as offer
1.8.5. Acceptance mainly by completed performance
1.8.5.1. if completed by multiple, reward belongs to first one giving notice of completed performance
2. INVALIDITY (aka consequenes of contracting with an incapable party):
2.1. Relative nullity of contract.
2.1.1. If contract declared null, nullity has retroactive effect: parties return to prior patrimonial position
2.2. Contract may be rescinded by action of incapable person, not by other party or by court on its own motion.
2.2.1. Action of relative nullity must be brought within 5 years from time ground of nullity ceased
2.2.1.1. Only person that can do this is incapable person once they become capable.
2.2.1.2. BUT incapacity can be raised as a defense any time.
2.2.2. Other party may request confirmation or rescission by incapable party or their legal representative.
3. Capacity (determined @ time of contract).
3.1. Exceptions: Persons with Incapacity
3.1.1. Unemancipated Minors
3.1.1.1. Minor < 18
3.1.1.1.1. Exception: Emancipated Minors have capacity.
3.1.1.2. Relative Nullity of contract in favor of minor (to protect incapable party)
3.1.1.2.1. 3 Exceptions:
3.1.2. Interdicts
3.1.2.1. *Interdiction always involves court order; declared by court.
3.1.2.1.1. Curator appointed as legal representative of interdict.
3.1.2.2. Reasons for interdiction:
3.1.2.2.1. 1) Physical Inability
3.1.2.2.2. 2) Mental Inability to make a reasoned decision.
3.1.2.3. Types of Interdiction:
3.1.2.3.1. Full Interdiction (no capacity to make any juridical act)
3.1.2.3.2. Limited Interdiction (may be able to enter into specified juridical acts)
3.1.2.4. Effects of Interdiction:
3.1.2.4.1. NOT RETROACTIVE; prior contracts still stand.
3.1.2.4.2. If application successful, retroactive ONLY TO DATE OF FILING.
3.1.2.4.3. May be modified or terminated by court; effective on date signed by court
3.1.3. Persons DoR
3.1.3.1. Persons DoR can be temporary (i.e. lucid intervals)
3.1.3.1.1. Must not be lucid at time of contract.
3.1.3.2. No prior court order needed; DoR examined by court before which suit for nullity is pending.
3.1.3.3. Invalidity specific to Persons DoR:
3.1.3.3.1. DoR can rescind onerous contract with proof that the other party should've known you were DoR @ time of contract.
3.1.3.3.2. DoR can rescind gratuitous contract without proof that other party knew you were DoR @ time of contract (bc other person is just sent to prior patrimonial position aka shouldn't be unjustly enriched).
3.1.3.4. DoR entered contract then died: can attack on 4 grounds:
3.1.3.4.1. 1) Contract was gratuitous
3.1.3.4.2. 2) Evidences lack of understanding
3.1.3.4.3. 3) Was made within 30 days of death
3.1.3.4.4. 4) Petition/application for interdiction was filed before they died.
3.2. All natural persons presumed to have capacity to contract.
4. OBJECT
4.1. Parties are free to contract for any object that is all 3 of the following:
4.1.1. Lawful
4.1.1.1. Includes all corporeal or incorporeal things
4.1.1.1.1. EXCEPTION: if prohibited by law
4.1.1.1.2. EXCEPTION: Succession of living person
4.1.1.2. Limits to Freedom
4.1.1.2.1. Juridical acts may not derogate from laws for public interest
4.1.2. Possible
4.1.2.1. An object is possible or impossible according to its own nature; NOT according to the parties' ability to perform
4.1.2.1.1. Kind of Object
4.1.2.1.2. Quantity of Object
4.1.3. Determined OR Determinable
4.1.3.1. Object MUST exist at the moment the contract is formed
4.1.3.1.1. EXCEPTION: Sale of Future Things
4.1.3.1.2. EXCEPTION: Sale of Hopes
4.1.3.2. Quantity = determinable if quantity is left to discretion of 3rd party
4.1.3.3. Price = determinable if price is left to discretion of 3rd party
4.1.3.3.1. Price may be determined by court if:
4.2. Promesse de Porte-Fort
4.2.1. Object may be that a 3rd person will incur an obligation or render performance
4.2.1.1. 3rd Party Accepts
4.2.1.1.1. 3rd party becomes a bound obligor if accepted (ratified).
4.2.1.2. 3rd Party Denies
4.2.1.2.1. Promisor is obligor/liable IF 3rd person doesn't bind himself of doesn't perform
4.2.1.3. Not aleatory bc it's not up to chance. There's an obligor either way (i.e. obligation created no matter what--if 3rd party doesn't perform, promisor must)
4.3. Third Party Beneficiary/Stipulation Pour Autrui
4.3.1. ONLY WHEN PROVIDED BY LAW
4.3.1.1. This gives birth of obligation to beneficiary, but 3rd party is not the promisor/promisee so 3rd not a member of the contract
4.3.1.2. Bilateral Obligation/Contract
4.3.1.3. Similar to an accessory contract
4.3.1.4. Is 3rd party beneficiary valid?
4.3.1.4.1. 3rd party must have a legal or factual relationship with the stipulator
4.3.1.4.2. 3rd party must avail himself of the benefit (manifest). 3rd party has power to deny.
4.3.1.5. Can the contract be dissolved/revoked?
4.3.1.5.1. If 3rd party acepted:
4.3.1.5.2. If 3rd party denied:
4.3.2. 4 Requirements of Valid Third Party Beneficiary Contract:
4.3.2.1. 1) Stipulation for 3rd party is manifestly clear
4.3.2.2. 2) Certainty as to the benefit provided to the 3rd party
4.3.2.3. 3) benefit must be intended
4.3.2.3.1. If just incidental; invalid
4.3.2.4. 4) Must be a valid cause for the stipulation:
4.3.2.4.1. Legal Relationship OR
4.3.2.4.2. Factual Relationship involving:
5. Cause
5.1. Cause is the reason why a person hold a right (or reason why a party obligates themself).
5.1.1. A party may be obligated by a promise when he knew or should have known that the promise would induce the other party to rely on it to his detriment AND the other party was reasonable in so relying.
5.1.1.1. Reoovery may be limited to the expenses incurred or the damages suffered as a result of the promisee's reliance on the promise.
5.1.1.1.1. Detrimental Reliance on gratuitous promise is not presumed
5.2. Cause is of an obligation; not a contract.
5.2.1. Cause is presumed valid in LA.
5.2.2. 1 contract can have > 1 conventional obligation; thus > 1 cause within the contract.
5.2.2.1. Obligations typically have only 1 cause.
5.3. Principal Causes
5.3.1. ALL PRINCIPAL CAUSES OF AN OBLIGATION MUST BE VALID
5.3.2. Objective Cause = nature of contract
5.3.2.1. Objective cause is ALWAYS THE PRINCIPAL CAUSE.
5.3.2.1.1. Objective cause can be onerous or gratuitous.
5.3.3. Subjective Cause = parties' personal motives
5.3.3.1. DEFAULT: subsidiary cause
5.3.3.2. Subjective causes can be elevated to principal causes by either:
5.3.3.2.1. including it as a condition in the contract
5.3.3.2.2. communicating it to the other party
5.3.3.3. When elevated to principal, there are now > 1 principal causes (bc obj always principal)
5.4. Onerous vs. Donative Causes
5.4.1. Onerous
5.4.1.1. Definition: party is obligated in order to obtain an advantage in exchange for her obligation
5.4.1.1.1. ex: contract of sale
5.4.1.2. Default onerous cause: the object of the other party's obligaton
5.4.1.3. More common than donative
5.4.1.4. Onerous/Remunerative Donations:
5.4.1.4.1. If the value of the charge or service rendered is > 2/3 of the value of the gift: follow onerous contract rules
5.4.2. Donative
5.4.2.1. (Onerous) Donations:
5.4.2.1.1. If the value of the charge or service rendered is < 2/3 of the value of the gift: follow gratuitous contract rules
5.4.2.2. Default donative cause: liberality
5.4.2.3. Definition: conferring a benefit to the other party
5.5. Absence of Cause vs. Failure of Cause
5.5.1. Absence of Cause
5.5.1.1. One or all of the principal causes is non-existent at the time of the agreement
5.5.1.1.1. Effects:
5.5.1.1.2. Pre-Existing Duty Rule:
5.5.2. Failure of Cause
5.5.2.1. All principal causes existed at the time of the agreement (but failed later)
5.5.2.1.1. Contract Not Affected When:
5.5.2.1.2. Parties Released from Contract (from then and for future) When:
5.5.2.1.3. Effects:
5.6. True Cause vs. False Cause
5.6.1. True Cause
5.6.1.1. Party's consent actually corresponds to the true object of the contract
5.6.1.2. Cause need not be expressed
5.6.1.3. Default = causes presumed true
5.6.2. False Cause
5.6.2.1. Party's consent does not correspond to the truth
5.6.2.1.1. Intentionally
5.6.2.1.2. Unintentionally
5.7. Licit Cause vs. Illicit Cause
5.7.1. Licit Cause
5.7.1.1. Cause does not violate mandatory laws or good morals
5.7.1.2. Default = causes presumed licit
5.7.2. Illicit Cause
5.7.2.1. Effects:
5.7.2.1.1. absolutely null
5.7.2.2. Cause violates mandatory laws or good morals
5.7.2.2.1. If object = Illicit:
5.7.2.2.2. If object = licit: